Mike Keller from PCWorld elaborates on the feature he thinks will be very exciting: MIDI.
I'll even admit I may have skimmed past the MIDI API's added in the first 4.2 beta without so much as batting an eye. But now that it's here I think the importance of the new framework is setting in. The iPhone and iPad have already gained some attention as music creation tools (if only in novelty), but I believe serious musicians may now start to recognize iOS as a real studio tool. The large touch screen of the iPad makes it a pretty powerful (and extremely flexible) controller. It will be interesting to see what developers come up with using the iPhone's accelerometer and gyroscope as MIDI input.